By Antoinette Rodriguez, MBA
Financial Advisors spend a lot of time building up their practice to those who already have assets, generally older folks who are approaching retirement or business people who are accumulating wealth.
After you have been in business for a certain period of time, though, it's inevitable that your clients will either pass away or have other life events that cause them to transfer wealth to their loved ones.
Many Senior Financial Advisors today are woefully unprepared for what will happen when the next generation takes over their clients' assets.
If you are not aware of what motivates the new decision-makers, your book will essentially be a do-over and you will have to start prospecting as if you are a rookie. That’s not only an extremely expensive business proposition, but it doesn't serve the next generation's best interests well either.
Here are 5 reasons Financial Advisors should market to and build relationships with multiple generations of their client households:
1. Unprecedented Wealth Transfer
According to an intergenerational wealth transfer study published by Accenture, "over the next 30 to 40 years, $30 trillion in financial and non-financial assets is expected to pass from the Baby Boomers to their heirs in North America."
2. Influence
Children influence their parents. Everything from large purchases, to long-term care and daily decisions, will at some point be made by millennials or even younger generations.
3. Educated Kids
Children of wealthy parents may be high-income earners themselves. As is usually the case in upwardly mobile families, many children of wealthy parents have an even higher education than their parents, including a large percentage of college degrees. This higher level of education generally translates into higher incomes and possible self-made net worth of their own.
4. Generational Mismatch
If the Financial Advisor is much older than the next generation, like their parents, they might consider the FA “vintage.” They may have different priorities than their parents and prefer digital communication and platforms, for example. You will have to take great care to adjust to the next generation's shifting priorities or even better, proactively add complementary multi-generational Financial Advisors to your team.
5. Game Over
Just like with widows, if you don't market or build relationships with the next generation, you will highly likely lose the account. This is the worst case "game over" scenario.
Need advice on your Marketing Plan, business strategy, partnership issues or sales training to help your staff become better rainmakers? Contact Antoinette Rodriguez today for a complimentary consultation.
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